Dr. Ole Nordhoff: "Today's e-commerce would no longer work without smart packaging"

Interview with Dr. Ole Nordhoff

Year on year Germans spend an average of seven to nine days on shopping – at supermarkets. This figure does not include electronics stores or clothes shops. Yet thanks to the increasing proliferation of e-commerce, it is actually possible to save that time.

The German postal service Deutsche Post DHL Group shares this view. The logistics company runs its own online supermarket – Allyouneedfresh.de – and has therefore gathered its own experience in the online food sector and has developed some innovative solutions. Their aim is to help this segment towards a breakthrough in Germany’s e-commerce. It does so, for instance, through its DHL Multibox, so that the supermarket actually visits the consumer, as it were. Goods remain protected, sealed and cooled at the best possible level, using a flexible system of detachable in-box partitions – right up to the customer’s doorstep.

Dr. Ole Nordhoff, Ole Nordhoff, Executive Vice President of DHL Paket Deutschland, has given us some exciting glimpses in our Interview of the Month.

Nordhoff’s doctorate is in business administration, and in this interview with the interpack magazine he shares with us why e-commerce is experiencing such a boom, how packaging should be designed to provide the best protection for products purchased online and what kind of challenges there are for online retailers and the packaging industry in the shipment of food.

NORDHOFF ON THE SUBJECT OF E-COMMERCE

Dr. Nordhoff, why do consumers order products online? What’s important to them and where do they see the benefits?

One major reason is flexibility in time and space, as consumers want to do their shopping wherever and whenever it suits them – whether they’re lying on a sofa, using a tablet, or whether they’re sitting on a train, using a phone. Also, online buying offers a high level of transparency.

Consumers can compare different shops quickly, directly and easily and then choose whatever they like best. Furthermore, buyers are now increasingly keen on wide-ranging services and benefits, such as purchasing advice and product availability.

DR. NORDHOFF ABOUT THE REQUIREMENTS ON TRANSPORT PACKAGING

It’s important in online trading that each package should meet the needs of both the product and the shipping process. What does it mean to your production?

E-commerce wouldn’t work without packaging. Both the packaging and the goods need to be suitable for shipment, so that the ordered items can reach their destination in good condition. After all, most online trade is about products that are also sold by high-street retailers, including specialists.

In a physical shop, for instance, a pot of yoghurt is protected by a special tray, so that a thin aluminium lid is sufficient. In online trading, however, some further protection is needed. In most cases this means additional padding and some sturdy outer packaging. If a product package is developed specially for online trading, it is possible to meet the needs of the shipping process at the same time. Furthermore, when a package is developed, it must also be suitable for the handling of returns. This may include, for instance, the choice of material, a device for opening the package or ensuring its resealability.

What does packaging need to achieve from the online retailer’s perspective, and what kind of packaging aspects are important to consumers when they buy goods online?

Online retailers want the shipping process to be as smooth as possible. Each package needs to be set up, filled, padded and locked. This may not be much of a problem if ten packages are shipped per day. But if this number increases to 100, the situation looks quite different, and it’s important that the handling should be quick and easy.

For the consumer the packaging is part of their general shopping experience, as unpacking is, as it were, the climax of their purchase. Also, more and more consumers are interested in sustainability when purchasing online. So the use of renewable raw materials is becoming increasingly important, particularly in packaging materials.

DR. NORDHOFF ON ONLINE BUYING PATTERNS IN FOOD

What’s the potential of online food purchases in Germany?

At the moment the proportion of food purchased online is still relatively small in Germany. However, when we look at other countries, it’s a segment which – given the right conditions – has a lot more potential in online trading. So we’re confident that sales will increase enormously. During the last quarter of 2015 alone sales were 50% higher than in the same quarter the year before, and the German Federal E-Commerce and Mail Order Association is expecting another, even greater increase for 2016.

The Deutsche Post DHL Group understood the opportunities of the online food sector at an early stage. Why do you believe this sector, in particular, is so exciting?

We are confident that the potential growth figures in the online food sector can be raised even further, and so we’re conducting a variety of activities to promote its development within Germany. Working together with retail companies, we encourage this development, for instance, through our involvement in AllyouneedFresh where we’ve collected first-hand details of market expectations, gathered experience and developed solutions which may benefit the retail sector as a whole.

DR. NORDHOFF ON THE PROCESSING OF ONLINE FOOD PURCHASES

How long does it take to compile and package an average weekend shopping basket at a warehouse, e.g. at AllyouneedFresh, and then to deliver it to the consumer?

You can imagine this as being about ten times faster than a normal purchase, because the structures of those special warehouses have been optimised for precisely this purpose. Ultra-fresh products such as lettuce are bought fresh from the wholesale market by AllyouneedFresh. It usually takes only one working day from the order to its delivery on the doorstep.

What are the special challenges of food in packaging and shipping?

If the food is perishable, then it is enormously important to ensure sufficient refrigeration throughout the shipment. One challenge is that some food items need to be kept cool at different temperatures, e.g. frozen food, dairy products and vegetables, yet they have to be shipped in one box. At the same time, the packaging has to offer appropriate protection while also avoiding any excessive outer packaging. Another challenge for fresh food is that it has to reach the customer at great speed. The DHL online supermarket AllyouneedFresh therefore delivers each order on whichever day the customer has specified online.

DR. NORDHOFF ON THE SHIPPING OF FOOD PURCHASED ONLINE AND ON THE DHL MULTIBOX

To what extent have the logistics and packaging sectors already been influenced by increasing e-commerce in the food industry?

New segments in e-commerce are leading to packaging solutions which are specially geared towards each product that is shipped. In online food, for instance, we’ve developed the DHL Multibox. It is the first reusable insulated container that has been certified for a weight of up to 31.5 kilos in a parcel delivery network while also being approved for sorting machines. What makes it so special is that it has detachable inner partitions. This makes it possible to create up to 4 different refrigeration zones within the same box, ranging from -18°C to an ambient temperature, or to create partitions for glass bottles.

And of course there are the questions of waste disposal and of recycling the packaging material: What does a customer need to bear in mind when they receive food in a special shipping container?

The DHL Multibox keeps the products sealed until delivery and, where appropriate, refrigerated. It is not opened until it reaches the customer’s front door, when the content is handed over in biodegradable bags. Those bags are included within the box, hanging up and automatically protecting the food from physical impact. Another benefit for the consumer is that the carrier takes the box back straightaway, so that the transport packaging does not stay with the customer. The DHS Multibox is then used straightaway for the next food delivery.

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